Communicating Customer Value: Integrated Marketing Communications Strategy A Global Perspective 14 Philip Kotler Gary Armstrong Swee Hoon Ang Siew Meng Leong Chin Tiong Tan Oliver Yau Hon-Ming PowerPoint slides adapted by Oliver Yau Hon-Ming 

Learning Objectives After studying this chapter, you should be able to: 1.Discuss the process and advantages of integrated marketing communications in communicating customer value. 2.Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix. 3.Outline the steps in developing effective marketing communications. 4.Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix.

14-3 Chapter Online 1.The Promotion Mix 2.Steps in Developing Effective Communication 3.Setting the Total Promotion Budget and Mix 4.Socially Responsible Marketing Communication

14-4 The Promotion Mix The promotion mix is the specific blend of advertising, public relations, sales promotion, personal selling, and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationships.

14-5Copyright © 2009 Pearson Education South Asia Pte Ltd The Promotion Mix Major Promotion Tools Advertising Sales promotion Public relations Personal selling Direct marketing

14-6 The Promotion Mix Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Broadcast Print Internet Outdoor

14-7 The Promotion Mix Sales promotion is the short-term incentives to encourage the purchase or sale of a product or service. Discounts Coupons Displays Demonstrations

14-8 The Promotion Mix Public relations involves building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Press releases Sponsorships Special events Web pages

14-9 The Promotion Mix Personal selling is the personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Sales presentations Trade shows Incentive programs

14-10 The Promotion Mix Direct marketing involves making direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships—by using direct mail, telephone, direct-response television, , and the Internet to communicate directly with specific consumers. Catalog Telemarketing Kiosks

14-11 Steps in Developing Effective Communication Effective Communication Identify the target audience Determine the communication objectives Design the message Choose the media Select the message source Collect feedback

14-12 Steps in Developing Effective Communication Identifying the Target Audience Marketing communications begins with a clear target audience to answer these questions: What will be said How it will be said When it will be said Where it will be said Who will say it

14-13 Determining the Communications Objectives Marketers seek a purchase response that result from a consumer decision-making process that includes the stages of buyer readiness.

14-14 Steps in Developing Effective Communication Designing a Message AIDA Model Get Attention Hold Interest Arouse Desire Obtain Action

AIDA Model AIDA is an acronym used in marketing that describes a common list of events that may occur when a consumer engages with an advertisement. A - Attention (Awareness): attract the attention of the customer. I - Interest: raise customer interest by focusing on and demonstrating advantages and benefits (instead of focusing on features, as in traditional advertising). D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs. A - Action: lead customers towards taking action and/or purchasing. Using a system like this gives one a general understanding of how to target a market effectively

14-16Copyright © 2009 Pearson Education South Asia Pte Ltd Setting the Total Promotion Budget and Mix Shaping the Overall Promotion Mix The Nature of Each Promotion Tool Advertising Personal selling Sales promotion Public relations Direct marketing

14-17Copyright © 2009 Pearson Education South Asia Pte Ltd Setting the Total Promotion Budget and Mix Shaping the Overall Promotion Mix The Nature of Each Promotion Tool Advertising reaches masses of geographically dispersed buyers at a low cost per exposure and enables the seller to repeat a message many times. Advertising is impersonal, cannot be directly persuasive as personal selling, and can be expensive.

14-18Copyright © 2009 Pearson Education South Asia Pte Ltd Setting the Total Promotion Budget and Mix Shaping the Overall Promotion Mix The Nature of Each Promotion Tool Personal selling is the most effective method at certain stages of the buying process, particularly in building buyers’ preferences, convictions, and actions and developing customer relationships.

14-19Copyright © 2009 Pearson Education South Asia Pte Ltd Setting the Total Promotion Budget and Mix Shaping the Overall Promotion Mix The Nature of Each Promotion Tool Sales promotion includes coupons, contests, cents-off deals, and premiums that attract consumer attention and offer strong incentives to purchase. It can be used to dramatize product offers and to boost sagging sales.

14-20Copyright © 2009 Pearson Education South Asia Pte Ltd Shaping the Overall Promotion Mix The Nature of Each Promotion Tool Public relations is a very believable form of promotion that includes new stories, features, sponsorships, and events. Direct marketing is a non-public, immediate, customized, and interactive promotional tool that includes direct mail, catalogs, telemarketing, and online marketing.

14-21Copyright © 2009 Pearson Education South Asia Pte Ltd Promotion Mix Strategies Push strategy involves pushing the product to the consumers by inducing channel members to carry the product and promote it to final consumers. Used by B2B companies

14-22Copyright © 2009 Pearson Education South Asia Pte Ltd Setting the Total Promotion Budget and Mix Promotion Mix Strategies Pull strategy is when the producer directs its marketing activities toward the final consumers to induce them to buy the product and create demand from channel members. Used by B2C companies

14-23Copyright © 2009 Pearson Education South Asia Pte Ltd Socially Responsible Marketing Communication Integrating the Promotion Mix: Checklist Communicate openly and honestly with consumers and resellers. Avoid deceptive or false advertising. Avoid bait advertising. Conform to all federal, state, and local regulations.

14-24Copyright © 2009 Pearson Education South Asia Pte Ltd Socially Responsible Marketing Communication Integrating the Promotion Mix: Checklist Follow rules of “fair competition.” Do not offer bribes. Do not attempt to obtain competitors’ trade secrets. Do not belittle competitors or their products.